The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has constituted a committee to address issues bordering on inactive crude oil blocks in order to reverse the trend.
Dr Kelechi Ofoegbu, Executive Commissioner, Economic Regulation and Strategic Planning, NUPRC, made this known at its Consultation Forum on Friday in Abuja.
The committee, he said would adopt holistic measures to reverse trend of the 23 failed oil blocks being managed by oil companies under the Production Sharing Contracts (PSC) with Nigerian National Petroleum Company (NNPC) Limited.
Ofoegbu spoke to newsmen at the end of the 4th Phase of its Consultation Forum with Stakeholders on regulations development, as mandated by Section 216 (4)(g) of the Petroleum Industry Act (PIA).
It would be recalled that latest Oil and Gas Industry Report for 2021 released by the Nigeria Extractive Industries Transparency Initiative (NEITI) revealed that 23 oil blocks managed by both international and local oil companies under crude oil PSC with NNPC Ltd., failed to produce crude or were inactive.
PSC is an arrangement or contract where the contracted oil company undertakes to fund operations to explore, develop and produce petroleum within a concession area, under an Oil Prospecting Licence and for an agreed number of years.
“The percentage is correct but there are reasons behind that and also well known to us and also to the operators.
“The committee, which includes the NNPC Ltd., will look at it holistically and come out with measures that will reverse that trend.
“So there are measures such as tackling crude theft, attracting further investments and all of that,” he said.
Speaking on the sector’s overarching mandate, he said that Nigeria was initially producing 1.2 million Barrels Per Day, adding that the aim was to exit 2023 with 2 million barrels and in the mid to short term to do 4 million barrels.
“We are going to rely on the production from every available acreage.
“The PIA in section 216 required that prior to bringing into existence any regulations, we should seek the opinions of, consult and engage with the stakeholders,” he added
He said in keeping compliance with that provision, the NUPRC had been convening stakeholders while the forum was the fourth edition with stakeholders.
“We looked at the draft Assignment Regulations, Assignment Regulations, Vocation Regulations, Development Contract Regulations and today, we are looking at the Commercial Regulations.
“The aim of the consultation is basically to have support for what we are proposing and to also enrich the document and the process and ensure the outcome will stand the test of time.”
According to him, the finalised draft will be sent to the ministry of Justice for ratification and approval.
He said the aim also was to improve commercial efficiency, reduce cost of production and promote profitability and ease of doing business.
(NAN)(www.nannews.ng)